Often farmers and business owners feel, when it comes to some of their employees, hired hands, migrant workers, etc. that if they are not watching them - then their people are not working. We can all understand that. For many of us it is too easy to confuse activity with progress and we'd rather see our employees busy, even if it what they're doing is a waste of their time and our money.
So when it comes to our small business account, is it any surprise that we feel the same way. We know instinctively (whether it's actually true or not) that we are over paying for routine items, that while we are paying their fees they are pushing our work along to a less expensive associate - and they are pocketing the difference.
Here are a few ways to approach your billing relationship with your accountant. Use them as a guide to a discussion about how you and your small business accountant can work together more effectively. Showing up with some potentially practical ideas will let him or her know that you've given it some thought and you are not going to simply opt-in to their cookie cutter “standard" billing process.
If the small business accountant says, “You're the first client to propose a fee structure other than our standard by-the-hour billing, " or “We have always used an hourly fees for business clients, " tell them, “Fine, but that's not how we will work with our small business accountants in the future, the question is whether you want to work with us going forward or not.
Always use the expression “or not" - it lets them know you are perfectly willing to let them off the hook and move on to business accountants who will work with you differently than they normally do.
Set a budget. Simply put, you put a cap on their fees - what they can charge in a quarter, for routine filings, for a certain matters, for meetings with fellow professionals on your behalf, etc. . This budget can be cast in stone or flexible - there can be different limits on different types of transactions, whatever. The important thing is that you are not forking over a blank check, they know that if they exceed what you agreed upon - it's on them, and most importantly that you are paying attention.
If your accountant uncovers additional work that was never considered but which must still be performed, they can do it without having to come to you for additional money as long as it falls within your agreed upon budget. And if it doesn't they will need to consult with you before undertaking it.
Have a “per-project" fee. Instead of or perhaps in addition to a budget for the usual compliance activities - filing your taxes in a timely manner and all the other things business accountants do routinely, why don't you negotiate fair fees for special reports or filings.
For example completing loan documents, P&L statements, meetings with auditors etc. Setting per-project limits keeps everyone on the same page - sort of outs a frame around items that are not commonplace and do not appear in the quarterly budget.
Use performance based fees. This is an ideal way to handle billing for the creation of accounting related studies and documents when considering a new opportunity or a joint venture of some sort. The base fee could perhaps cover the business accountants’ hard costs only. The more successful the results the more they receive. There are no doubt many other, more realistic probably, scenarios where you and your small business accountant can work together and they get paid based on the results they achieve.
Naturally these examples are just a shot in the dark, they may not work or may not even be legally possible for business accountants in your jurisdiction to operate on the basis I've described. Nevertheless they can be starting points for discussion, triggers to help you and your small business accountant think of even more creative ways to do business together.
It is not my intention to show you tricks to get free or cheap business accounting services. It is to help you and your accountant consider alternatives that will make you feel better about your relationship. A clear understanding of how and on what terms you and your business accountants are working together will put you need in a frame of mind that allows you to pick up the phone whenever there is an important business decision and call your accountant - BEFORE you act, rather than afterwords.
It is my intention to make you feel better, knowing that just because you can't watch them - they probably are working on your behalf and anyway, you are being billed based on a fairly negotiated agreement between the two of you.
Business owners who think strategically, plan comprehensively, and execute flawlessly will almost certainly eclipse those who simply set goals and hope for the best. When these successful business owners interview business accountants one of their key objectives is to put together a team of professionals who can help them navigate the complicated nuances of existing and evolving tax laws.
If you want to be successful, you must put together a successful team of professionals to help you. Often the people who manage the progress of the team and its planning are the business accountants you have on board. Visit http://www.FamilyBusinessAccountants.com and contribute to the conversation based on your experiences as a business owner or as a business accountant.
Just like you, Wayne Messick is concerned about the continuous refinement of his strategies for productivity in these challenging times. He is the author of dozens of articles for mainstream businesses, emerging professionals and association executives and now in phase III of his career spends hours each week creating articles from his experiences.